A monumental moment occurred in the city of monuments Tuesday as Republicans battled to fix the fiscal 2011 budget mess inherited from Democrats (who, conveniently, forget that they put last November's election ahead of their fiduciary responsibility).

House Republicans, led by the plain-speaking Paul Ryan of Wisconsin, introduced a fiscal 2012 budget that pulls no punches and minces no numbers in finally getting serious about addressing the federal government's fiscal mess.

It slashes trillions in spending over the next decade, including nearly half-a-trillion dollars through 2013. It boldly tackles Medicare (an even worse ticking time bomb than Social Security), phasing in a private-sector, market-based solution that's far more senior-friendly.

The Tribune-Review is in favor of abolishing Medicare - just so you know.

But that's not the big news here. Take a look. From the Huffingtonpost:

When Paul Ryan unveiled his budget today, he touted it as a "Path to Prosperity" and he and his colleagues kept saying it was "based in fact." In reality, Ryan's claims of prosperity are based on an analysis - written at his request by the conservative Heritage Foundation - that has more basis in magic than economics. [emphasis added.]

Now, who would have guessed that Scaife's braintrust would be cheering about a budget that's based on an analysis by the Scaife funded Heritage Foundation?

The Republican budget’s economic projections are rosy, including growth rates of over 3 percent for the next three years. An analysis performed by the conservative Heritage Foundation at Ryan’s request found the unemployment rate would be reduced to 4 percent in 2015 by Ryan’s budget, an incredibly low number when many economists believe the economy will not return to so-called “full employment” of about 5 percent until years after that.

It’s worth noting that this is not just unrealistic, it’s impossible. When unemployment drops beneath 5 percent, the Federal Reserve starts raising interest rates until a recession pushes it back up. This is deemed necessary to prevent inflationary wage increases.

But even that's not the big news. The big news is that the Scaife-funded Heritage foundation got the numbers wrong and pulled them from the report. Krugman has the evidence, if you wanted to go see it.

Not a word about any of this from the braintrust, of course. They dutifully cheer what their boss has already paid for (flawed as it is).

4 comments:

Erskine Bowles and Alan Simpson, the co-chairs of the bipartisan President's Fiscal Committee, in an April 5th op-ed at The Hill state, "The budget released this morning by House Budget Committee Chairman Paul Ryan is a serious, honest, straightforward approach to addressing our nation's enormous fiscal challenges. We applaud him..." Demean, deflect, denigrate, all you want, the President and his minions, Pelosi and Reid, have been abysmal failures on the budget. I've heard the Dem whining points, "This is an assault on women". How pathetic!!??

"As for Mr Ryan's plan, The Economist is cautiously supportive; the policy is far from perfect, we write, but Mr Ryan deserves credit for courage and honesty in discussing the true nature of the long-term fiscal crunch.

rich, you do realize that just because the magazine is called "The Economist" doesn't mean that what you quoted was written by a PhD? For all that y'all conservatives complain about Maria's and Dayvoe's sources, you aren't shy about referencing a partisan source yourself.

The wisdom of providing supplemental income and medical care for senior citizens can certainly be debated, but there are at least two things that should be pointed out. First, Social Security and Medicare are currently paid for by their own payroll taxes. Those taxes may be inadequate for their funding in the future, but right now they are not a drain on other government operations. So complaining about them destroying government is somewhat disingenuous. The second point is that senior citizens are the group that votes in the highest numbers, so I strongly suspect the Republicans will conveniently forget about entitlement reform when it comes to actually making policy (like Republicans have already forgotten about the job creation they were shrieking about last November).

Ryan's budget proposal creates trillions of dollars of new debt before it gets to balancing the budget in about thirty years. Yet it assumes that unemployment will start dropping next year, and the economy will grow massively (I guess because business will be so thrilled that the government has adopted a Republican plan) in the next thirty years. This despite the fact that there is no historical evidence that slashing government programs and taxes for the rich will cause GNP to increase, for any period time and certainly not for thirty years straight with no recessions.

Of course, eight years of the second George Bush gave us a record of massive cuts in government spending and an unprecedented return of American manufacturing production. Oh wait ... And of course during the Bush years the close watch the economic experts that are the back bone of the Republican party insured that there could never be a bubble in any market, certainly not one as important as housing. And those economic experts would make sure that private institutions like banks and financial services firms would not mislead consumers, especially not poor consumers with opaque and complicated forms and language. And the Republican party, the "adults" would never let financial firms bundle fraudulent loans into securities, risking a collapse of the financial industry that would hugely damage the credit market and in so doing put tens of millions of Americans out of work. Because those courageous, honest, straightforward and serious Republicans would never do that to America.

rich, once again, name one economist that refutes Paul Krugman's accusations about Ryan's budget proposal. As far as I am concerned, the numbers produced by the Heritage Foundation that are supposed to reflect the effect of adopting Ryan's budget proposal are pure fantasy. But the pain that would be caused to tens of millions of lower and middle income American is real.

rich, do you really get off on making the poor more miserable than they are now?